United States v. Scaretta

912 F. Supp. 48, 1996 U.S. Dist. LEXIS 528, 1996 WL 20777
CourtDistrict Court, E.D. New York
DecidedJanuary 18, 1996
DocketNo. CR-93-0534 (S-2)(ADS)
StatusPublished

This text of 912 F. Supp. 48 (United States v. Scaretta) is published on Counsel Stack Legal Research, covering District Court, E.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Scaretta, 912 F. Supp. 48, 1996 U.S. Dist. LEXIS 528, 1996 WL 20777 (E.D.N.Y. 1996).

Opinion

SPATT, District Judge.

This opinion follows a Fatico evidentiary hearing, held before the Court on December 15, 1995, December 28, 1995, December 29, 1995, January 2, 1996 and January 3, 1996. On December 28, 1995, by reason of a problem between the defendant Vincent Graff and [50]*50Ms counsel, the Court severed Graffs sentencing proceeding and continued with the Fatico hearing as against the defendants Robert Scaretta and Susanna Scaretta.

On November 21, 1994, following a jury trial, the Scarettas were convicted of, among other crimes, conspiracy to commit bank fraud and substantive counts of bank fraud. The charges arose from the Scarettas’ operation of Revere Armored, Inc., an armored car delivery company, which was involved in various other financial operations for its bank and other customers, having its main facility in Bohemia, New York.

The presentence report prepared by the Probation Department on July 7, 1995, at paragraphs 29 and 47 calculated the loss, attributed to these defendants, at the sum of approximately 35 million dollars. Applying this loss to guideline 2F1.1(b)(1)(Q), (more than 20 million dollars and less than 40 million dollars), tMs resulted in a 16 offense level increase. The defendants disputed the amount of the loss and requested this Fatico hearing.

Discussion

The burden of proof in tMs Fatico hearing is on the Government to establish the facts required to support the base offense level, in this case the amount of the loss, by a preponderance of the evidence. U.S. v. Shonubi, 998 F.2d 84 (2d Cir.1993); U.S. v. Carmona, 873 F.2d 569 (2d Cir.1989); U.S. v. Lee, 818 F.2d 1052, 1057 (2d Cir.) cert. den., 484 U.S. 956, 108 S.Ct. 350, 98 L.Ed.2d 376 (1987).

Findings

After a review of all the evidence taken at this Fatico hearing, and considering the relevant trial testimony, the Court makes the following findmgs:

Among the operations of the Revere Armored Inc. in February 1993 was the transportation of currency and coin; pickmg up moneys for bank customers; counting and processing moneys in Revere’s money room; acting as a limited bank branch maintaming and storing an inventory of currency and coin for certain banks; and transporting money to the Federal Reserve Bank (“The Fed”).

The Court finds that defendants Robert Scaretta and Susanna Scaretta were the sole owners of Revere and actively managed and supervised all of the activities of the company. The Court has already determined that both Robert Scaretta and Susanna Scaretta were organizers and leaders. As such, they had virtually unlimited access to the currency and coin stored at the Revere Bohemia facility.

The proof at the trial, accepted by the Court, is that there were constant shortages in the banks’ funds at Revere; that virtually all the “proof sheets” submitted by Revere to the banks were false in that the sums actually held by Revere were less than the sums recorded in the proof sheets; that at the time of bank audits, when representatives of the banks would physically visit the Bohemia facility to personally count the banks funds, moneys from other banks were transferred into the vault or bin of the bank to be audited, so that the shortages would be hidden.

Further, there was proof elicited at the trial, which the Court accepts, that the Scar-ettas spent large sums of money gambling in Atlantic City, New Jersey, on a weekly basis. In fact, eooperatmg witnesses testified that $30,000 in bank funds were set aside for these gambling trips each week. In addition, weekly cash sums between $5,000 to $7,000 were paid to a contractor for work completed at the Revere facilities and in various Revere employees’ houses. Moreover, large sums of bank funds financed Revere’s substantial “off-the-books” cash payroll. Other sums were used for bribes, as demonstrated by the testimony of William “Joe” Butler, who received regular cash payments from Robert Scaretta while employed as a money room manager at NatWest.

The Court finds that the Government established these additional facts at the Fatico hearing:

After Revere’s business terminated and closed on February 9, 1993, the FBI and the Suffolk County Police Department attempted to secure the Bohemia facility, wMch stored [51]*51large sums of money. Simultaneously with the criminal investigation, the Government commenced a civil forfeiture proceeding and obtained an order of seizure of the Bohemia facility. Confronted with the state of disarray of the Bohemia facility and the huge amounts of currency and coin scattered throughout the building and in vehicles; and realizing that hordes of representatives from the banks, customers and insurance companies surrounded the facility clamoring for their money, property and information, the Government, logically turned to the Federal Court for assistance and guidance. The immediate object of the FBI was to secure and count the money in the Bohemia facility. Apparently neither the FBI nor the Suffolk County Police Department could provide sufficient and continued surveillance in order to safeguard this fungible asset.

The Court stepped in and appointed as Special Master and Temporary Receiver Jeffrey Stark, a former State Supreme Court Justice, to do the following: 1) safeguard the moneys, 2) count and store the moneys, 3) determine the identifiable cash and property and return it to the proper owners, and 4) determine ownership of the unidentifiable funds and set up a procedure to attempt to reimburse the proper owners.

To facilitate these objects, the Court authorized the Special Master to retain the firm of Brinks, Inc., an acknowledged leader in the armored car field. Brinks was assigned the task of entering the Bohemia facility in the presence of other designated persons, counting the moneys, transporting the moneys to the Brinks Kent Avenue facility, securing the funds pending the determinations of Special Master Stark and the Court, and depositing the moneys in the Federal Reserve account of the U.S. Marshal’s Service.

The Court finds that the FBI was not directly involved in the counting, transportation and storing of the funds. The FBI supervised the area, and took possession of certain records. All of the money at the Bohemia facility was removed by Brinks under the supervision of the Special Master and the Revere insurance company agents, under the overall direction of the Court.

Special Master Stark arrived at the Revere Bohemia facility on February 12, 1993 with the immediate purpose to secure the Revere assets, count the moneys, and move them to a safe storage place as soon as possible. He successfully accomplished all of these missions in a timely manner. Under the continuing scrutiny of the FBI, and the Revere insurance company representatives, the money was counted in the Revere facility. The proceedings at Revere were photographed and videotaped by Court direction and all the currency and coin were moved out to the secure Brink facility within three days. It was a massive undertaking requiring a number of trips by many vehicles, moving approximately 25,000 packages, and 235 skids of coin. It took 35 to 45 men to load one trailer.

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912 F. Supp. 48, 1996 U.S. Dist. LEXIS 528, 1996 WL 20777, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-scaretta-nyed-1996.